Why is Fine Art Expensive—Part 3, Unique Products

We are occasionally asked why fine art is so expensive. People have asked, for example,“How much does a piece of canvas and a tube of paint cost? It can’t be more than a few dollars for the materials.” There is more to it than materials, however, and I can think of three things. First, running a small business involves overhead; second, making an oil painting requires specialized skill; third, the final product is unique. In parts one and two, I discussed overhead and skill, this article is about the third idea, unique products.

In May of 2008, Christie’s sold a Thomas Moran painting called Green River of Wyoming at auction for almost 18 million dollars. Eighteen million! For a Thomas Moran! During a recession! Why can a painting like that command such a price? Because there will never be another one. It is the only one in the world, a one-of-a-kind beauty, painted by a man who died in 1926. I’d really like to have that painting myself, but so would everyone else, and someone is willing to pay more than I could ever afford.

What about paying that kind of price for the work of a living painter? Can’t we expect that they will produce many more similar pieces? Yes and no. It is true, of course, that living painters generally command less for their work because fresh paintings by them are neither rare nor unexpected. It is not true, however, that any painter will paint forever, and, if you see something from their easel that shows them clearly at the top of their game, you can count on owning an exceedingly rare and unique object.

In our experience, it can often be worthwhile for an artist to create pre-painting studies or post-painting copies of an outstanding scene. We have done that in some cases, such that there are two or three works with very similar subject matter that have been sold separately. I suppose that each study or copy that is sold can slightly diminish the value of the original full-sized work, but the thing to keep in mind is that even the study is a hand-made item. The study is not a photocopy, is not a scan, is not mass-production duplicate. It is, instead, a hand-made object with all that implies. It has unique brushwork, paint choices, and even mistakes. In short, it remains a one of a kind piece of art.

Prints, on the other hand, are not made by hand. Prints are prints. Whether they are called giclees, limited edition prints, or posters, they are all machine-made. They are imaged, scanned, or machine-copied and are available for mass-production. As a result, they should be priced accordingly. They may be perfectly nice objects, but they are not unique. In our business, we have done a small amount of imaging and have attempted some giclees. We have not, however, generally been happy with the quality of the product and have sold very few of them. In any case, they are not expensive and will never command the price of an original.

I sometimes joke with art buyers that the painting they are buying from Valerie will become much more valuable tomorrow if Valerie is hit by a truck today. Not very funny, really, but it illustrates my point. Fine art is expensive because it is unique. It is a one-of-a-kind, hand-made object. There will never be another one like it. And, in about a hundred years, if you hang on to one of Valerie's peices, it might even be worth $18 million.

Why is Fine Art Expensive—Part 2, Skill

We are occasionally asked why fine art is so expensive. People have asked, for example,
“How much does a piece of canvas and a tube of paint cost? It can’t be more than a few dollars for the materials.” There is more to it than materials, however, and I can think of three things. First, running a small business involves overhead; second, making an oil painting requires specialized skill; third, the final product is unique. In part one, I discussed overhead; this post is about the second idea, specialized skill.

Without too much training, most people can cut the grass; those without a college degree can generally learn to clean the swimming pool; and grocers can hire baggers without requiring extensive documentation of advanced skills. Jobs like these often do not pay well because the supply of labor is large (anybody can do it) and the demand is low (I can do it myself). If, on the other hand, you needed brain surgery, you wouldn’t want just anybody doing it. In fact, you would want the best trained and most experienced person you could find. And, you would probably be willing to pay him or her hundreds or even thousands of dollars per hour for that training and experience. In the case of brain surgery, the supply of labor is small (few can do it) and the demand is high (most of us need important medical care at some point).

How does any of this relate to painting landscapes? Like surgeons, painters have a specialized skill; painters are not pool cleaners. Not everyone can do what a painter can do. In fact, very skilled landscape painters, even in southern Utah, are rare. In addition, skilled painters are made, not born. Sure, some people are more “artistic” than others, but good painters work hard and invest significant resources in building their skills. Often, that takes the form of higher education. One of our favorite painters in southern Utah, Josh Baird, has both a bachelors and a masters degree in fine art. In other cases, spending significant time with a mentor is a way to develop the necessary skills. Our friend, Brad Holt, has studied with Jim Jones and has painted perhaps hundreds of paintings over the past few years—effort which is paying off in Brad’s growing reputation.

Someone cutting your grass might expect to be paid, say, $10 per hour. A brain surgeon, on the other hand, might charge one hundred times that. What would you expect to pay a very skilled painter? Is it fair for them to ask $10 per hour? Probably most people would agree to that. How about $20 per hour? How about $60? Valerie has said that she probably has the training and experience of a good plumber. Don’t they charge about $60 per hour? Let’s say it takes her 10 hours to finish a medium sized painting. Is her labor worth $600? Add to that the overhead costs from part one, and you might have an $850 or $900 painting.

Of course, the problem with this line of thinking is that it accounts only for supply, not for demand. What if there is no demand for my art? If there is no demand for me and my lawn mower, am I going to be able to charge $10 per hour? No, I might need to offer lawn cutting for $5 per hour. The reason a top doctor can charge a high rate is that there is typically a high demand for specialized medical care. Why? Because if I don’t get it, I may die. Not so with fine art. If I don’t buy your painting is it going to kill me? Absolutely not.

So, what is the answer, what is the specialized skill of a top landscape painter worth? We think it is fair to ask as much as a plumber might. No shame in that. But, we also realize that fine art is not the same as food and water—or even a working potty. A painting is not necessary for survival. As a result, we recognize that the ebb and flow of demand is the most important factor in what we can expect to earn. During the recent recession, we were willing to work for what a grocery bagger might make. In good times, we might expect to be paid like a plumber. As demand for Valerie’s work increases, however, we might some day dream of being paid like a surgeon. Are you sure you can survive without one of her paintings?

Dixie Invitational

Mark your calendars. This year's Dixie Invitational starts Friday night (12 February 2010) with a gala dinner and pre-sale. The exhibit of art by "major regional artists" will continue until 28 March 2010. So, dust off the check book and head to Dixie State College in St. George for one of the best art shows in the state. Valerie will have two pieces in the show, including the one pictured here.

Why is Fine Art Expensive—Part 1, Overhead

We are occasionally asked why fine art is so expensive. People have asked, for example,
“How much does a piece of canvas and a few paints cost? It can’t be more than a few dollars for the materials.” There is more to it than materials, however, and I can think of three things. First, running a small business involves overhead; second, making an oil painting requires specialized skill; third, the final product is unique. This post is about the first of these, overhead.

Artists need to work for a living. To be a good painter requires time in front of the easel—a lot of time. It also requires canvas, paint, thinner, and frames. All of this needs a place to go. In other words, an artist needs some space in which to work. Even a modest and frugal artist needs a small studio. And studio space is not free. In order to stay in business, an artist needs to pay the rent. This is overhead. And, if you buy a painting, you need to pay your share of this overhead. Let’s say that an artist can find a very inexpensive space for a couple hundred a month—OK, even $150 per month for a little closet. That means you need about $1800 for a year of being in the fine art business. Now, let’s say you can sell ten paintings during the year. The first $180 of the cost of each of those paintings goes to rent. It sounds like a lot, I know, but these are hand-made pieces. If you bought a massed produced widget, you would have to pay some overhead, too, but for ten million widgets, each of them need only contribute a penny to the rent. And, don’t forget about the cost of utilities. If you have to pay for electricity or propane on top of your rent, the cost of overhead goes up.

In addition, like any professional, a painter has to be available. That is, she needs to have a phone, an email account, and, in this day and age, a webpage. Buyers, collectors, gallery owners, and others want to be able to reach you. Artists are not hermits. They need to meet people and return phone calls. What does this require? A cell phone? A DSL subscription? A computer? Probably all of that. And, if you are going to respond to requests for sketches and studies from prospective buyers, you may need a scanner, a printer, and a digital camera, too. I don’t think art buyers want to be involved with an artist who cannot or does not return phone calls, or have access to email. These are required professional tools today and artists are professionals. So, what does it cost? We pay what I suspect is a relatively low rate of about $80 per month for a cell phone and an internet connection. A computer, camera, and a printer? You might scrape by on $1200 or $1500 total for the basics. And these should last for a couple of years, so you can divide the cost over 20 theoretical art sales. But, still, you can add another $100 or $150 per painting for communications overhead.

Art buyers sometimes want to know why oil paintings cost so much. One thing to consider is the cost of overhead associated with running a professional business. To have a studio, pay your utilities, and maintain modern communications costs money. For a painter, the way to make this money is to sell paintings. When you buy a painting, you are helping the artist to cover his or her overhead. It is the same with any business.

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